These Were Chinese Travelers’ Top Destinations in 2016

With the year coming to an end, Jing Travel has dug into Chinese travel trends to find the most popular destinations for Chinese tourists in 2016. For countries in East Asia, as well as the United States, Australia and New Zealand, double-digit growth in Chinese tourist arrivals has become the new normal, while old favorites have begun to fall out of favor with China’s growing number of tourists. In Europe, Chinese tourists were hesitant to visit destinations such as France and Germany, and many instead opted for trips to Scandinavia and Eastern Europe—which were perceived as less affected by the recent string of terror attacks on the continent. Meanwhile, eased travel restrictions and a growing number of direct flights to China's second and third-tier cities helped Southeast Asian countries break new Chinese tourism records. According to Jing Travel research, these were the top ranking destinations for Chinese tourists in 2016: Hong Kong remains the foremost destination for Chinese travelers, but it's quickly losing ground to its East Asian competitors. Hong Kong (-8.2 percent) Hong Kong remains the by far most popular destination for Chinese tourists, with more than double the number of Chinese arrivals than the next runner up. However, it’s not all good news for Hong Kong. For the second year in a row, Chinese arrivals are down—and the trend seems to be accelerating. Year-on-year growth between January and October 2016 stands at -8.6 percent, an even bigger drop than the negative growth of three percent it saw in 2015. Hong Kong’s overall success in the Chinese tourism market has come at a cost, with both anti-Chinese sentiments on the rise, as well as a tourism industry extremely reliant on Chinese tourists. In 2015, Chinese arrivals represented 77.3 percent of all foreign arrivals, and there are few other tourism markets that could help make up for Hong Kong’s decreasing popularity in the Chinese market. While Hong Kong undoubtedly remains a highly attractive destination for Chinese tourists, increasingly liberal visa restrictions in the region, as well as a rise of duty-free shopping in destinations such as Japan and South Korea mean increased competition for Hong Kong. The fact that the Hong Kong dollar has appreciated against the Chinese yuan while the Japanese yen has become increasingly affordable doesn’t help Hong Kong’s case as a shopping destination either. In spite of its negative performance in recent years, Hong Kong is set to remain Chinese tourists’ top destination for years to come, but future growth of Chinese outbound tourism appears to lie elsewhere. Macau (-0.4 percent) China’s other Special Administrative Region (SAR) remains almost unchanged from its performance in 2015, with Chinese tourist arrivals down just 0.4 percent—a welcome change of pace from 2015, when Macau saw Chinese arrivals drop by almost four percent. In contrast to Hong Kong, Macau has done a better job in alleviating the effects of external factors on its tourism industry. As Xi Jinping’s anti-corruption campaign continues, high-rollers at Macau’s casinos have begun looking elsewhere for gaming entertainment, leading to overall growth of casinos throughout Asia. Since then, Macau has begun reorienting its tourism industry to increasingly cater to mass-market gambling and Chinese families. Even though Macau’s casino revenue has been falling more than analysts’ estimates in 2016, Chinese tourist arrivals remain almost unchanged from 2015, indicating that Macau’s recent reorientation has proven fruitful. While it might be difficult for Macau’s tourism authority to celebrate (slightly) negative growth, it’s easy to see how the situation could have been much worse following the fall of big-money gambling in Macau. Thailand (+16.55 percent) In spite of a high-profile crackdown on so-called zero-dollar tours—tour packages priced below cost that often target Chinese travelers and recoup losses from forced shopping and dining—Chinese tourism growth to Thailand remains strong in 2016. However, the largest hit as part of the crackdown only happened in September, and led to the seizure of 2,150 tour buses and 4.7 billion Thai baht (US$132.3 million) in cash. Early indications show that Chinese tourism is down across the board from September onward, making it far from unlikely that the final tally for 2016 ends up lower than the 16.55 percent year-over-year growth for the period between January and October. Notably, the period of mourning that followed the Thai king’s death only started by mid-October, leaving the prolonged effects of Thailand’s new situation for the last few months of the year. While a less-than-stellar end of the year seems more than likely for Thailand, it remains the top destination for China’s global travelers outside China’s SARs. Thailand’s growing number of direct flights to China and its well-developed tourism infrastructure make it a safe bet for sustained popularity in China’s growing tourism market. As China’s budget travelers are looking elsewhere for their next vacation, they are also leaving room for more profitable market segments to visit Thailand. South Korea (+39.5 percent) Chinese tourism to South Korea reached new heights in 2016, breaking its previous record set in 2014 with Chinese arrivals up almost 40 percent year-over-year. While the significant gain in comparison to 2015 is part a result of the MERS scare last year—which caused tourist arrivals to drop—it still represents a 33 percent gain on the previous record. While Chinese state media were quick to claim that Chinese tourists chose to travel to other destinations than South Korea after its decision to deploy a U.S. Army anti-ballistic missile system (THAAD), arrival numbers show otherwise. It would seem as if fears of a negative impact on Chinese tourism to South Korea were completely unfounded. Meanwhile, in South Korea, conglomerates were scrambling to acquire newly-issued duty-free licenses to cash in on Chinese tourists’ duty-free dollars—underlining the importance of the Chinese market. The Korean Tourism Association (KTO), on the other hand, is taking a cautious approach to the Chinese market in spite of its recent gains. With Chinese tourists now representing 48 percent of all overseas visitors in Korea, KTO is looking to hedge its bets by focusing on other markets. As the case of Hong Kong shows, an overreliance on the Chinese market could be a risky affair. Japan (+28.7 percent) While the trend of bakugai, or “explosive shopping”, has been slowing down among Chinese visitors in Japan—the overall appeal of Japan among Chinese tourists remains strong. With a yen that is again appreciating against the Chinese yuan, shopping in Japan may not be as good of a deal as it was back in 2015. However, the boom of Chinese travel to Japan in 2015 led to a sharp increase in the number of flights between Chinese and Japanese cities, and Japan is better prepared for Chinese tourists than ever. As a result, the cost of travel to Japan is increasingly competitive in the Chinese market, and Chinese tourists are better informed about the experiences they can enjoy while visiting Japan than ever before. With a growing number of flights between China’s lower-tier cities and cities in Japan, Chinese arrival numbers remain on an upward trend. A more pressing problem, however, is Chinese tourist dispersion in Japan—with hotels and sights in major destinations increasingly overcrowded. Taiwan (-11.7 percent) Chinese tourism in Taiwan has had a tough year, after China showed its dissatisfaction with the election of Tsai Ing-Wen, Taiwan’s independence-leaning president, by putting curbs on Chinese tourism to Taiwan. In the end, the effects of China’s hardline approach to Taiwan’s new leader were mitigated to a greater extent than many anticipated. While the number of Chinese tour groups visiting Taiwan has plummeted, continued popularity among China’s independent travelers along with growing popularity in other East Asian countries helped Taiwan’s tourism industry hold its ground in face of Chinese tourism retaliation. United States (+14.8 percent) November marked the end of the U.S.-China Tourism Year, an initiative undertaken by the Chinese and U.S. governments to boost tourism ties—and even though the actual benefits of said tourism year can be questioned, it has been a good year for the United States with continued double-digit Chinese tourism growth. With the help of the recently introduced 10-year tourist visa for Chinese nationals and a growing number of direct flights to U.S. cities beyond the coasts, the United States has also done a good job in attracting repeat Chinese visitors looking to explore more of the country. However, the future of Chinese tourism to the United States remains unclear due to president-elect Trump’s harsh rhetoric, but unclear policy proposals, regarding China. Singapore (+38.2 percent) In part a recovery from the negative performance caused by the 2014 Malaysia Airlines MH370 disaster and the 2015 Southeast Asian Haze, Chinese tourism has nevertheless performed exceptionally well in 2016, with an almost 40 percent increase in Chinese arrivals. Unfortunately for Singapore, however, Chinese budget travelers represent a growing number of Chinese arrivals, dampening the overall profitability of its many Chinese tourists. In fact, much of its growth comes from Chinese budget travelers visiting by land from neighboring Malaysia, as well as from a growing number of flight connections with less affluent lower-tier cities in China. While serving an excellent hub for Chinese budget travelers looking to visit nearby, cheaper, countries—average spending and the average number of nights spent in Singapore are down, making Singapore’s 2016 growth a bittersweet victory. Vietnam (+55.19 percent) Vietnam shows the highest growth rate among all 2016’s top destinations for Chinese travelers, and has come a long way since Chinese tourism took a tumble after the 2014 anti-China protests. Seen as an even more affordable alternative to neighboring Thailand, Vietnam has seen multiple new direct flight connections with China established throughout 2016, and is only likely to keep growing in popularity after Thailand’s budget tour crackdown in late-2016. France (-29.6 percent) While France remains the by far most popular destination for Chinese travelers in Europe, performance in the Chinese tourism market is still suffering from the effects of recent terror attacks. Chinese tourists, known to be very security-conscious, are instead eying Eastern Europe and Scandinavia for their trips to Europe—with Chinese tourism in destinations such as the Czech Republic and the Scandinavian countries still showing strong growth. While certainly still on many Chinese travelers’ bucket lists, many seem to be delaying their visits for what they perceive are safer times. Malaysia (+23.1 percent) Much like Vietnam, Malaysia has become an increasingly popular destination for Chinese travelers on a budget. Known for its diverse cities and landscapes, as well as bordering to popular countries such as Thailand and Singapore has made it an ideal destination for tours in Southeast Asia. A cheaper Malaysian ringgit has also made it a popular shopping destination, with many Chinese tourists opting to go shopping in Johor Bahru, right on the border to Singapore, rather than spending their money in Singapore. Germany (-5.6 percent) Even though it’s been less affected than France, Germany has still seen Chinese arrivals decline in face of a rising fear of terror attacks throughout Western Europe. An attack by an Afghan refugee that associated with the Islamic State on two tourists from Hong Kong on board a German train earlier this year was also the subject for a lot of media attention in China, solidifying the perception that it might not be the best time to make a visit to Western Europe. In Western Europe’s place, other “Western” countries have been gaining ground in the Chinese market, with both Australia (+18.8 percent) and New Zealand (+12.7 percent) viewed as increasingly attractive destinations in the Chinese market—placing them just outside this list. Data sources: Hong Kong Tourism Board, Macao Government Tourism Office, M.O.T.C. Taiwan, Japan National Tourism Organization, Singapore Tourism Board, Thailand Department of Tourism, Viet Nam National Administration of Tourism, Tourism Australia, Korea Tourism Administration, U.s. Department of Commerce, Federal Statistical Office of Germany, Statistics New Zealand. Disclaimer: October arrival data for Singapore and Germany are Jing Travel estimates, arrival numbers for Malaysia and France are Jing Travel projections, U.S. data is a forecast.

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These Were Chinese Travelers’ Top Destinations in 2016